Imagine – getting consistent revenue over and over again -knowing what’s coming in each month – makes you almost giddy doesn’t it? THIS is one of the biggest secrets to growing your business and boost your biz to expanding revenue.
Increase Recurring Revenue. New business owners quickly miss the consistency of a regular paycheck. Every business has cash flow peaks and valleys. This creates stress when you are short of cash and can lead to excess spending when you are flush.
Recurring revenue that you can count on receiving every month is the key to eliminating the down times that are natural to your business and industry cycle. This predictable revenue stream greatly increases the value of your business.
Your goal should be to have enough steady income coming in every month to cover your normal overhead expenses. Every business can create recurring revenue by offering:
- Hard contracts. Cell phones are a great example of this. Payment is locked in for a two-year period.
- Auto-renewal subscriptions such as hard drive backups and cloud-based software. Subscription boxes (Birchbox, etc.) are also in this category.
- Support agreements. Technical support contracts sold after a major product purchase are another good option.
- Consumables. Buy a coffee machine for home use, and you will consistently need to purchase the pods.
- Monthly payments for a required annual purchase. I use this for my large tax returns (see the bonus section for an example of the letter we send out).
- Monthly retainers similar to what attorneys use. Our computer support company does this. They offer a package that includes priority service, regular backups, and up to four hours of support for a fixed price.
Don't be afraid of the peaks and valleys, be prepared for them. A downtime isn't truly a downtime if you are prepared for it.